Publications

ACPP news releases

The U.S. House on Wednesday, Dec. 12, 2018, passed a compromise Farm Bill that avoided threatened cuts to the Supplemental Nutrition Assistance Program (SNAP). All members of Alabama’s House delegation joined Alabama’s two U.S. senators in voting for the bill. Alabama Arise executive director Robyn Hyden issued the following statement in response:

“The Farm Bill contains good news for struggling families across Alabama and across the country. It protects and strengthens the Supplemental Nutrition Assistance Program, our nation’s most effective anti-hunger program. SNAP has long had bipartisan support, and we commend House and Senate negotiators for continuing that tradition by working together across party lines to protect food assistance.

“SNAP helps nearly 900,000 Alabamians make ends meet, and we’re pleased that Congress passed a Farm Bill that protects this critical program. We thank Sens. Doug Jones and Richard Shelby and Alabama’s House members for voting to keep food on hundreds of thousands of Alabama tables.

“We also thank the many Alabamians who stood together to help protect food assistance after the House initially voted for harmful SNAP cuts that would have increased hunger. Their calls and letters to our representatives in Washington were critical in ensuring that SNAP will continue to help feed a range of people in households that struggle to make ends meet, including children, parents, seniors, people with disabilities, and working people with low pay and inconsistent hours."

The state’s uninsured rate for children (3.1 percent) remained below the national average (5 percent) in 2017. But after years of improvement, Alabama’s number of uninsured children under 19 ticked up from 32,000 in 2016 to 36,000 in 2017. While the increase was not statistically significant, it is a warning sign that Alabama could slip backward in children’s health care if policymakers do not protect and expand coverage, Alabama Arise policy director Jim Carnes said.

“Alabama’s rate of uninsured children has improved from 20 percent to just 3.1 percent in the last two decades, and CHIP and Medicaid have played big roles in that success,” Carnes said. “Our state should build on those gains by expanding Medicaid to cover uninsured adults. Medicaid expansion would boost financial security for struggling parents and increase the odds that their children get and stay insured. It would be a win for children, a win for families and a win for Alabama.”

Congress’ delay last year in renewing federal funding for the Children’s Health Insurance Program (CHIP) was a driver of the uptick in Alabama’s number of uninsured kids, the Georgetown CCF study says. CHIP covers about 171,000 Alabama children living in families with low or moderate incomes, including more than 84,000 on ALL Kids. Congressional efforts to cap and cut Medicaid and undermine the Affordable Care Act also likely contributed to the increase, the report finds.

Alabama has a regressive tax structure – meaning the lower your income, the higher your tax rate – and Alabama’s taxes are more regressive than those in most other states, ITEP finds. The Alabamians who earn the least – less than $18,600 a year – pay 9.9 percent of their income in state and local taxes on average. By contrast, the top 1 percent in Alabama – those who make $448,000 a year or more – pay an average of just 5 percent of their income in state and local taxes.

“For decades, big corporations and wealthy households have benefited the most from economic growth,” Alabama Arise executive director Robyn Hyden said. “But Alabama taxes struggling families deeper into poverty while lavishing tax breaks onto people who can afford to pay more. It’s time to modernize Alabama’s taxes by untaxing groceries and requiring wealthy people and corporations to pay a greater share of the cost of education, health care and other public services that make life better for everyone.”

The biggest driver of Alabama’s upside-down tax system is its heavy reliance on sales taxes to raise revenue for public services. That story is similar in many other states, but sales taxes in Alabama are particularly regressive because it is one of only three states with no tax break on groceries.

Alabama is also one of only three states to allow taxpayers to deduct every dollar of federal income tax payments on their state income taxes – a tax break that disproportionately benefits rich households. Recent increases in court fees and other user fees, which fall hardest on families who struggle to make ends meet, also have added to the regressive nature of Alabama taxes.

Such an upside-down tax structure limits Alabama’s ability to invest in services that support economic growth and help all residents stay healthy and productive, according to ITEP. If states fail to address systemic causes of growing income inequality, they will have more difficulty raising the revenue they need over time. The more income that goes to wealthy people (and the lower a state’s overall tax rate on the wealthy), the more slowly a state’s revenue grows over time, ITEP finds.

“Rising income inequality is unconscionable, and it is certainly a problem that local, state and federal lawmakers should address,” ITEP deputy director Meg Wiehe said. “Regressive state tax systems didn’t cause the growing income divide, but they certainly exacerbate the problem. State lawmakers have control over how their tax systems are structured. They can and should enact more equitable tax policies that raise adequate revenue in a fair, sustainable way.”

Alabama’s cuts to state higher education funding over the last decade are among the deepest in the country, according to a new report from the Center on Budget and Policy Priorities (CBPP), a nonpartisan research organization based in Washington, D.C. The funding decline persisted even as the state’s economy began to rebound from the Great Recession.

Since 2008, Alabama has slashed state higher education funding by 34.6 percent or $4,290 per student, CBPP found. The state’s cuts are the nation’s third worst by dollar amount and fifth worst by percentage. Nationally, the average cuts since 2008 are 16 percent or $1,502 per student.

Alabama’s inadequate public investment in higher education over the last decade has contributed to rising tuition prices, often leaving students with little choice but to take on more debt or give up on their dreams of going to college. Between 2008 and 2018, the average tuition at public four-year institutions in Alabama jumped by $4,329, or 69.8 percent – far outpacing the national average growth of 36 percent. These soaring costs have erected barriers to opportunity for young people across Alabama, particularly for black, Hispanic and low-income students.

“Pushing the cost of college onto students and their families will not make our state stronger,” Alabama Arise policy analyst Carol Gundlach said. “We must invest adequately in higher education to be able to build an Alabama where everyone has the opportunity to succeed.”

Americans’ slow income growth has worsened the college unaffordability problem. While the average tuition bill increased by 36 percent between 2008 and 2018, median incomes grew by just over 2 percent. Nationally, the average tuition at a four-year public college accounted for 16.5 percent of median household income in 2017, up from 14 percent in 2008.

In Alabama, a college education is even less affordable, especially for black and Hispanic families. In 2017, the average tuition and fees at a public four-year university accounted for:• 21 percent of median household income for all Alabama families.• 32.2 percent of median household income for black families in Alabama.• 26.8 percent of median household income for Hispanic families in Alabama.

“The rising cost of college risks blocking one of America’s most important paths to economic mobility,” said CBPP senior policy analyst Michael Mitchell, the report’s lead author. “And while these costs hinder progress for everyone, black, Hispanic and low-income students continue to face the most significant barriers to opportunity.”

Financial aid has failed to bridge the gap created by rising tuition and relatively stagnant incomes. As a result, the share of students graduating with debt has increased. Between 2008 and 2015, the share of students graduating with debt from a public four-year institution rose from 55 percent to 59 percent nationally. The average amount of debt also increased during this period. On average, bachelor’s degree recipients at four-year public schools saw their debt grow by 26 percent (from $21,226 to $27,000). By contrast, the average amount of debt rose by only about 1 percent in the six years prior to the recession.

A large and growing share of future jobs will require college-educated workers. Greater public investment in higher education, particularly in need-based aid, would help Alabama develop the skilled and diverse workforce it needs to match the jobs of the future.

“All Alabamians, regardless of their income or where they grow up, deserve an opportunity to reach their full potential,” Gundlach said. “Our state should end tax breaks for large corporations and invest in making college more affordable for the students who need assistance the most.”

The uninsured rate for Alabama adults with low incomes is 36 percent in rural communities and small towns, and 29 percent in metro areas. Both rates are much higher than the national averages of 26 percent for rural areas and 18 percent for metro areas. Even in states that have not expanded Medicaid to cover adults with low wages, those rates have declined on average over the last decade.

But that progress has not reached many parts of Alabama, where the uninsured rate for low-income adults in rural areas and small towns was virtually unchanged between 2008-09 and 2015-16, the report found. And the Medicaid “work requirement” plan that Alabama has submitted for federal approval would drive the uninsured rate even higher by stripping Medicaid coverage from thousands of parents in poverty. Virtually all of those parents would be left with no realistic alternative for affordable coverage.

“Not only has Alabama failed to move forward on health coverage, but now our state is seeking to move backward by leaving even more people uninsured,” Alabama Arise policy director Jim Carnes said. “Alabama should drop its cruel efforts to punish people living in poverty and focus instead on expanding Medicaid so all Alabamians can get the care they need to become and stay healthy. Medicaid expansion would save hundreds of lives, create thousands of jobs and keep rural hospitals and clinics open to serve residents across our state.”

States that expanded Medicaid saw more than three times as large a decline in the uninsured rates for low-income adults living in rural areas and small towns than non-expansion states experienced between 2008-09 and 2015-16, the report found. Nationally, the uninsured rate for low-income adults fell by more than half – from 35 percent to 16 percent – in rural areas and small towns in states that expanded Medicaid. For states that have not expanded, the decline was much smaller: from 38 percent to 32 percent.

“Medicaid expansion would reduce the uninsured rate for residents across the entire state; however, the most dramatic improvement likely would be felt in small towns and rural areas of Alabama,” Georgetown CCF executive director Joan Alker said. “Improved coverage rates typically translate to a more stable health care system and help rural areas and small towns maintain availability of health care providers in areas where shortages are all too common. Access to rural health providers is especially important to women of child-bearing age and those with chronic conditions like asthma.”

In Alabama and elsewhere, jobs tend to be scarcer in rural areas and small towns, meaning fewer people have health insurance through their employers. And many of the jobs available in these communities – like farming and small businesses – are less likely to come with health benefits. Ten of the 11 Alabama counties with the highest unemployment rates in July 2018 were rural counties.